Slovenia’s government has approved budget proposals for 2027 and 2028 that envisage a declining state-budget deficit without introducing new taxes, relying on rising revenue, expenditure control and stronger economic activity.
According to the government announcement dated 4 October, the deficit would equal 2.9% of gross domestic product in 2027 and 2% in 2028. Revenue is projected at approximately €17 billion in the first year and €17.7 billion in the second.
The cabinet also approved draft legislation governing implementation of the two budgets. These are government proposals entering the legislative process, rather than confirmation that all spending provisions have received final parliamentary approval. GOV.SI
Finance Minister Andrej Šircelj presented the plans as consistent with fiscal rules and said the government intended to keep spending under control. Investment remains a stated priority, with ministers arguing that it can support future growth and strengthen public finances.
The proposals rest on an improved economic outlook. Slovenia’s Institute of Macroeconomic Analysis and Development recently raised its forecast for growth in 2026 to 3.8%, from the 2% projected in March. The economy expanded by 1.5% in 2025, according to figures cited by SeeNews.
A stronger starting point can increase tax receipts and make fiscal targets easier to achieve. However, a forecast is not a guarantee of revenue, and the planned deficit reduction depends on actual economic performance as well as spending decisions. SeeNews
Prime Minister Janez Janša identified demographic change as the country’s central long-term challenge. An ageing population increases demand for healthcare, social protection and care services while reducing the pool of available workers.
The government’s proposed response emphasises productivity, investment and more efficient use of public-sector staff. Janša also called for moving personnel toward services experiencing shortages and reducing administrative burdens.
That approach connects budget policy with a structural problem shared by much of Central and Eastern Europe. Even when economic growth improves in a particular year, demographic pressures can continue raising expenditure and constraining labour supply.
Slovenia’s fiscal debate therefore extends beyond the headline deficit. The composition and effectiveness of spending will influence whether investment expands productive capacity and whether essential services can meet growing demand.
The next stage is parliamentary scrutiny of the proposals and their underlying assumptions. The government has set out a path toward a smaller deficit; delivering it will require revenue growth and spending restraint to persist beyond the current improvement in the economic forecast.
